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Crabtree v. Elizabeth Arden Sales Corp., 110 N.E.2d 551 (1953)

Case Name: Crabtree v. Elizabeth Arden Sales Corp.
Plaintiff: Crabtree
Defendant: Elizabeth Arden Sales Corp.
Citation: 305 N.Y. 48, 110 N.E.2d 551 (1953)

Key Facts: The plaintiff was seeking employment with defendant. He asked for a three-year contract at $25,000. He wanted a contract because he was entering a new field and wanted job security while he mastered the field. The defendant’s president offered him $20,000/year for the first 6 months, $25,000 for the next 6 months, and $30,000 for the second year.  The president had her secretary create a memorandum that stated some of the terms (which was not signed) the executive VP created a “pay-roll change” card which also stated some of the terms (which was initialed). After the first year, the plaintiff was not given his payroll increase so he quit and filed this action. The president denied that there was a two year contract agreement and even if one was made, the statute of frauds barred it enforcement.

Issue: Whether the length of the employment contract can be inferred by multiple writings and oral testimony.

Procedural Posture: The trial court found for the plaintiff $14,000 and the appellate court affirmed.

Judgment: Affirmed

Reasoning: If the court finds a sufficient connection between the documents, through a reference in them to the same subject matter or transaction, and oral testimony is admitted to show the connection, the signed and unsigned writings can be read together.

 

Notes: Under the Statute of Frauds, courts require some writing but there does not need to be a formal or written contract. There should at least be a document(s) that lists the essential terms, particularly the terms that are in dispute.

Depending on the jurisdiction, courts will read the two documents together if either

  1. If the signed writings explicitly mentions the unsigned document(s), or
  2. The documents appear to relate to each other (more liberal approach which the court in this case used)

 

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Alaska Democratic Party v. Rice, 934 P.2d 1313 (1997)

Case Name: Alaska Democratic Party v. Rice
Plaintiff/Appellee: Kathleen Rice
Defendant/Appellant: Greg Wakefield and Alaska Democratic Party
Citation: 934 P.2d 1313 (1997)

 

Issue: Whether the doctrine of promissory estoppel can be invoked to enforce an oral contract that falls within the Statute of Frauds.

Key Facts: Ms. Rice contended that Mr. Wakefield (the chair-elect of the Alaska Democratic Party) offered her a two-year position as executive director of the party. Because of this offer she quit her current employment and moved from Maryland to Alaska.
No written contract was entered into between Rice and the defendants.
Rice brought two claims: (1) promissory estoppel and (2) misrepresentation.

Procedural Posture: The jury awarded a total of $30,422 ($28,864 on her promissory estoppel claim and $1,558 on her misrepresentation claim)

Judgment: The court affirmed the claims but reduced the recovery to $28,864 – the amount that represents only lost wages and benefits.

Reasoning: “The purpose of the Statute of Frauds is to prevent fraud by requiring that certain categories of contracts be reduced to writing. However, it is not intended as an escape route for persons seeking to avoid obligations undertaken by or imposed upon them.”

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Wright v. Newman, 266 Ga. 519 (1996)

Case Name: Wright v. Newman
Plaintiff/Appellee: Kim Newman
Defendant/Appellant: Bruce Wright
Citation: 266 Ga. 519, 467 S.E.2d 533 (1996)


Issue: Whether Wright can be held liable for child support for Newman’s son under the doctrine of promissory estoppel, even though the child is not Wright’s son.

Key Facts: Wright is the father of Newman’s daughter but not the father of Newman’s son. Newman filed suit to recover child support for both her daughter and son. Wright listed himself as the father on the son’s birth certificate and gave the son his last name. Wright knew that he was not the natural father. This evidenced that Wright promised both Newman and her son that he would assume the obligations and responsibilities of fatherhood, including providing support.

The detriment alleged is that Newman refrained from identifying and seeking support from the child’s natural father.

Procedural History: The trial court ordered Wright to pay child support for both children.

Holding: Under the evidence, the duty to support, which the defendant voluntarily assumed 10 years ago remains enforceable under the doctrine of promissory estoppel.

Judgment: Affirmed

Reasoning: Elements of promissory estoppel were met:

  • A promise – The defendant listed himself as the father on the child’s birth certificate and gave the child his last name, although he knew he was not the natural father.
  • The detriment – The plaintiff refrained from identifying and seeking support from the child’s natural father.
  • Reasonable Reliance – The defendant was the father of her other child and although it is disputed, remained in the child’s life for 10 years.
  • Injustice – Loss of child support for her son

Dissent: Plaintiff failed to meet her burden of proof that she incurred detriment by refraining from identifying and seeking support from the child’s natural father. The majority fails to state why she is prevented from now instituting a child support action against the natural father. Furthermore, Wright’s undisputed contentions are that he did not support the child the past seven years.

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Watts v. Watts, 137 Wis. 2d 506

Case Name: Watts v. Watts
Plaintiff:  Sue Ann Evans Watts
Defendant: James Watts
Citation: 137 Wis. 2d 506

Key Facts: The parties began living together in a “marriage-like” relationship, holding themselves out to the public as husband and wife. The plaintiff assumed the defendant’s surname, had two children with the defendant who also assumed his surname. The plaintiff did the home making services and even worked in the defendant’s office. She did not receive any compensation.

The plaintiff alleges that the defendant indicated to the plaintiff both orally and through his conduct that he considered her to be his wife and that she would share equally in the increased wealth.

Procedural Posture: The circuit court dismissed the amended complaint stating that the statutes authorizing a court to divide property does not apply to unmarried persons. The circuit court did not analyze the four other legal theories.

  • First legal theory – that her relationship with the defendant and their children constitute a family and entitle the plaintiff to bring an action for property division under the Family Code. The court rejected this claim because they believed the legislature specifically meant the legal family.
  • Second legal theory – Because of the defendant’s words and conduct, he should be estopped from asserting the lack of a legal marriage as a defense against the plaintiff’s claim for property division under sec. 767. The court concluded that “marriage by estoppel” should be applied in this cause because the legislature did not intend the family code to govern unmarried cohabitants.
  • Third legal theory – The parties had a contract, either express or implied in fact contract, to share equally the property accumulated during their relationship, which the defendant breached.  The defendant’s defense was that their relationship was immoral and illegal and that any recognition of a contract between the parties contravenes public policy and weakens the integrity of marriage. The court was not persuaded by the defendant that enforcing an express or implied in fact contract would violate the Wisconsin Family Code.
  • Fourth legal theory – Unjust enrichment. She alleges that the defendant accepted and retained the benefit of services she provided knowing that she expected to share equally in the wealth accumulated during their relationship and that it is unfair for the defendant to retain all the assets. She also states that a constructive trust should be imposed on the property as a result of the defendant’s unjust enrichment.

A claim for unjust enrichment does not arise out of an agreement entered into by the parties. Rather, an action for recovery based upon unjust enrichment is grounded on the moral principle that one who has received a benefit has a duty to make restitution where retaining such a benefit would be unjust.

Holding:  The court concluded that the plaintiff had pleaded the facts necessary to state a claim for damages. Unmarried cohabitants may raise claims based upon unjust enrichment following the termination of their relationships where one of the parties attempts to retain an unreasonable amount of the property acquired through the efforts of both.

Judgment: The plaintiff’s complaint has stated a claim upon which relief may be granted but that it may rest on contract, unjust enrichment or partition. Reversed for further proceedings.

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Katz v. Danny Dare, Inc., 610 S.W.2d 121 (1980)

Case Name: Katz v. Danny Dare, Inc.
Plaintiff/Appellant: I.G. Katz
Defendant/Appellee: Danny Dare, Inc.
Citation: 610 S.W.2d 121 (1980)

Issue: Whether the plaintiff relied to his detriment on the promise of the defendant to pay him a pension for as long as he lived.

Key Facts: Katz employed by Dare, Inc. and was the brother-in-law of the president. Katz was earning $23,000. The president continually sought for Katz to retire and eventually can to an agreement after 13 months. Dare said that it would pay Katz a $13,000 pension so long as he lived. Three years later, Dare sent a check for half the normal amount because Katz had begun working part-time and one day a week at Dare. The defendant stated that Katz would have been fired had he not elected to retire so Katz could not apply the doctrine of promissory estoppel.

Procedural History: Judgment was entered in favor of the defendant. The trial court said that since Katz had the choice of accepting retirement and a pension or being fired, that it could not be said that he suffered any detriment when he elected to retire.

Judgment: Reversed and remanded with directions to enter judgment in all suits in favor of Katz for the amount of unpaid pension.

Reasoning:

The elements of promissory estoppel are present:
1. A promise of a pension to Katz
2. His detrimental reliance on the promise (he would not have retired, he was no longer employable by the time Dare stopped paying him, and he failed to go out and obtain other employment)
3. Injustice can only be avoided by enforcing that promise

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Kirksey v. Kirksey, 8 Ala. 131 (1845)

Case Name: Kirksey v. Kirksey (1845)
Citation: 8 Ala. 131 (1845)

Issue: Whether the defendant’s promise lacked consideration and was therefore unenforceable when he told the plaintiff, the widow of his deceased brother, to sell everything she had and come live with him and he would provide a place for her and her children.

Key Facts: The plaintiff was the wife of the defendant’s brother, who is now deceased.  The defendant wrote her a letter and told her that she should sell everything and come to him and he would provide a place for her and her children to live. Within a month, the plaintiff abandoned her property and removed her family sixty miles to the defendant’s property. The defendant put her in a comfortable house and gave her land to cultivate. Subsequently, he notified her to move to an uncomfortable house in the woods and then required her to leave.

Procedural History: Verdict for the plaintiff for $200.

Holding: Reversed; however, the decision was written by the judge who did not agree with it.

Reasoning: There was no consideration. Although the plaintiff moved a distance of sixty miles, which she contends is sufficient consideration to support the promise, the majority believed that this was a condition to a conditional gift. However, the judge writing the opinion stated that the moving to the defendant’s (60 miles) was enough to constitute consideration to support the promise.

Compare this to Greiner v. Greiner in which the court enforced a similar promise without consideration through promissory estoppel.

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Greiner v. Greiner, 293 P. 759 (1930)

Case Name: Greiner v. Greiner
Plaintiff: Maggie Greiner
Defendant: Frank Greiner (son of Maggie)
Citation: 131 Kan. 760, 293 P. 759 (1930)

Issue: Whether the plaintiff’s promise can be enforced when it lacked consideration.

Key Facts: The plaintiff (a widow) told her son, the defendant, that if he moved back to her county she would give him land for a home. She later gave him possession of an 80-acre tract of land which he moved his family to. The mother then commenced an action of forcible detention against the defendant. The mother contends that there was no consideration.

However, the son contends that there was reliance on his mother’s promise. The defendant gave up his homestead in another county, moved, established himself and his family, made some lasting and valuable improvements and other expenditures.

Procedural History: The district court ordered the plaintiff to execute a deed conveying the 80-acre tract to defendant. Plaintiff appealed.

Judgment: The plaintiff should execute a deed to the defendant.

Reasoning: Although there was no consideration, in 1930 the concept of promissory estoppel had been established and can be used to enforce the promise.

 

See also Kirksey v. Kirksey

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Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004)

Case Name: Register.com, Inc. v. Verio, Inc.
Plaintiff/Appellee: Register.com
Defendant/Appellant: Verio, Inc.
Citation: 356 F.3d 393 (2d Cir. 2004)

Issue: Whether the defendant had assented and was bound by the terms of the plaintiff’s website when it was daily accessing the website through a software robot.

Key Facts: The defendant created an automated software program to submit queries for WHOIS information from various registrars, including the plaintiff. The defendant then used the information to conduct solicitations by email, telemarketing, and direct mail. The plaintiff demanded the defendant to stop because some of its clients were getting upset and then changed its restrictive legend to state that it prohibited use of the WHOIS information for mass solicitation “via direct mail, electronic mail, or by telephone.

The ICANN Agreement requires the registrar to permit use of its WHOIS data “for any lawful purposes except to: …support the transmission of mass unsolicited, commercial advertising or solicitations via email (spam).

Register asserted that Verio was:
(a) causing confusion among customers, who were led to believe Verio was affiliated with Register
(b) accessing Register’s computers without authorization, a violation of the Computer Fraud and Abuse Act; and
(c) trespassing on Register’s chattels in a manner likely to harm Register’s computer systems by the use of Verio’s automated robot software programs

Holding:  Verio had assented and was contractually bound by the terms of use of Register’s web site because Verio had used the site many times and was well aware of Register’s restrictions on use.

Where a benefit is offered, subject to stated conditions, and where the offeree takes the benefit with knowledge of the conditions, then the offeree is deemed to have accepted the conditions.

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Ray v. William G. Eurice & Bros, Inc., 93 A. 2d 272 (1952)

Case Name: Ray v. William G. Eurice & Bros, Inc.
Plaintiff: Calvin T. Ray and Katherine S. J. Ray
Defendant: William G. Eurice & Bros, Inc.
Citation: Maryland Court of Appeals; 201 Md. 115, 93 A. 2d 272 (1952)

 

Key Facts: Ray selected William G. Eurice & Bros, Inc. as the builder of a new home on a vacant lot owned by the plaintiff. Multiple meetings occurred between the plaintiff and the defendant in which they reviewed and edited the plans to build the home. A contract was submitted by the defendant to the plaintiff; however, the plaintiff did not accept this contract and had his attorney create a new contract. This new contract was submitted to the defendant and was signed by the defendant in the presence of the plaintiff. Copies of the new contract were also signed by the defendant at the bank which was providing the loan to the plaintiff for the home. Once construction was to begin on the home, the defendant claimed to have never seen the plaintiff’s contract and would not proceed in building the house with the specifications in the current contract.

Procedural History: The plaintiff brought an action against the defendant, in the Circuit Court for Baltimore County, for a complete breach of a written contract to build a house. The Circuit Court ruled in favor of the defendant and the plaintiffs appealed.

Issue: Whether a breach of contract exists if one party did not intend to agree to the contract yet signed the contract and had ample opportunity and ability to understand the contract.

Holding: The Maryland Court of Appeals found that the defendant did breach the written contract.

Reasoning: The Court believed that Eurice had the capacity to understand the written contract because of his experience in building homes. Ray was not a home builder but had extreme attention to detail due to his background as an aeronautical engineer. Therefore, there was no type of fraud or duress or unfair bargaining power. Furthermore, no mutual mistake can be proven for although Eurice may not have intended to agree to the specifications, his signature (on multiple copies of the same contract) shows that he had ample opportunity to read and understand what he was agreeing to.

Judgment: The court awarded the plaintiff the cost in excess of the contract price that would be incurred by the owner in have the home built; the sum o f$5,993.40.

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Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d 281 (1990)

Case Name: Quake Construction, Inc. v. American Airlines, Inc.
Plaintiff: Quake Construction, Inc.
Defendant: American Airlines, Inc. and Jones Brothers Construction Corporation
Citation: 141 Ill.2d 281 (1990)


Issue: Whether the letter of intent from the defendant is an enforceable contract.

Key Facts: The defendant received an invitation to bid on a project and submitted a bid to the defendant. The defendant notified the plaintiff that it had been awarded the contract for the project and asked for the license numbers of the subcontractors it intended to use. The plaintiff told the defendant that he could not use the license numbers until he received a signed subcontract agreement. The defendant informed Quake that he would shortly receive a written contract but to induce Quake to enter into agreements with its subcontractors, Jones sent Quake a letter of intent. At a preconstruction meeting, Jones told Quake, the subcontractors, and government officials that Quake was the GC for the project. Immediately following the meeting, American Airlines informed Quake that their involvement was terminated.

 Procedural History: The trial court granted the defendant’s motion to dismiss but the Court of Appeals reversed the decision.

Holding: The letter of intent may be regarded as a contract in its own right: a contract to engage in negotiations. The letter of intent was ambiguous to the parties’ intent to be bound.

Judgment: The court remanded it back to the trial court to review more evidence, in addition to the LOI, on the parties’ intent.

Rule: The fact that parties contemplate that a formal agreement will eventually be executed does not necessarily render prior agreements mere negotiations, where it is clear that the ultimate contract will be substantially based upon the same terms as the previous document. (Common Law)